Welcome to Eureka Street
Looking for thought provoking articles?Subscribe to Eureka Street and join the conversation.
Passwords must be at least 8 characters, contain upper and lower case letters, and a numeric value.
Eureka Street uses the Stripe payment gateway to process payments. The terms and conditions upon which Stripe processes payments and their privacy policy are available here.
Please note: The 40-day free-trial subscription is a limited time offer and expires 31/3/24. Subscribers will have 40 days of free access to Eureka Street content from the date they subscribe. You can cancel your subscription within that 40-day period without charge. After the 40-day free trial subscription period is over, you will be debited the $90 annual subscription amount. Our terms and conditions of membership still apply.
Australia’s Reserve Bank mainly concentrates on keeping inflation within an acceptable range and maintaining a high level of employment. Social equity has never been considered to be part of its mandate. It should be. Interest rates have been the biggest cause of economic and social division in Australia, not just between rich and poor, but also between older and younger generations.
If Australia does draw back from globalisation — as opposed to trade, which will continue — then there should be more focus on our primary sector and how it could be better financed. Australia’s long history as a primary producer constitutes what economists call a ‘comparative advantage’: an economic area in which a country does best while giving up the least.
Over the last two years, money printing has created the illusion of strength in savings. But when reality resurfaces, and actual returns are required from actual economic and business activity, the global financial system will come under extreme stress.
The biggest mystery of the financial markets is why, when the monetary authorities have been printing money with their ears pinned back, is inflation for the most part not a problem? What happens with inflation is crucial to the short-term survival of the whole system. Global debt, which is running at well over 300 per cent of global GDP, is only sustainable because interest rates are exceptionally low (the base rate in Australia is only 0.1 per cent). And interest rates are low because inflation is not a problem.
At the beginning of the Covid-19 pandemic, the government reassured Australia ‘We’re all in this together’ but the truth is that the end of JobKeeper and the Coronavirus supplement payments will leave more than 2.6 million people in poverty.
Any government decision can cause hurt to some groups in society. There is a difference, however, between decisions that are only painful and those that are vindictive. The former may be regretted, but vindictiveness implies a satisfaction in causing pain that does not arise out of need. The reason for it must be sought in the minds and hearts and culture of those who devise the policies.
The celebration of pragmatism in Australian politics obscures the role that ideology has always already played. In fact, one of the more stealthily ideological moves in Australian politics, generally made within that swirl of commitments people call ‘centrism’, is the de-politicisation of policy — the attempt to present policy as responsive to natural imperatives rather than to specific values and ideals.
There is a common error about economics that, if not corrected, has far reaching consequences. It is the widely held belief that economic growth and consumption are the same. They are not.
The leaders of these nations, as well as acting amorally, have also apparently thrown the ideal of common civility to the winds. What are we to make of heads of government who hurl insults and are economical with the truth, use the gag continually, and turn their backs when those in opposition are speaking?
The response to COVID has invited reflection about the relative value of one human death (and so of one human life) as compared with another. This is a radical question because it makes us ask whether the value of a human life is defined by economic wellbeing and by potential contribution to the economy, or by deeper qualities.
There will be Great Reset in finance and economics. It is inevitable because the shock has been so great. The first problem is what to do with global debt, which was already at unsustainable levels before the virus hit: over 320 per cent of global GDP. The only way to prevent system-wide failure has been to lower interest rates to near zero levels.
The capacity to story our experience is a powerful tool for reflection and understanding. As adults we learn that no story is pure and we are capable of telling ourselves spin, but the shaping of experience into story is the bread and butter of our lives. Narrative, it has been said, is a primary act of mind.